Tuesday’s announcement that Swiss-based Glencore International will acquire Viterra Inc. for $6.1 billion will result in a healthy return for Alberta’s public pension fund manager. The Alberta Investment Management Corp (AIMCo), which had been Viterra’s largest shareholder with a 17% stake, bought in to the company at $8 a share in 2009 and stands to make $16.25 per share as a result of the deal.
AIMCo chief executive Leo de Bever told Reuters that the fund took a position in Viterra with the intent to turn the company into a major global food concern, but that Glencore’s offer was too good to ignore.
“As much as we would have liked to execute on our plan, this came along, a bid was made, we had to do what was best for our clients and that’s what she wrote,” said de Bever.
AIMCo and Viterra engaged in a public war of words last November, after AIMCo issued a press release chiding Viterra for failing to act on its concerns over the grain handler’s corporate governance structure.
“Alberta Investment Management Corporation will not accept Viterra’s vague plans for board renewal, further platitudes about seeking shareholder input, or closed door processes on important governance issues. We have been a shareholder for over two years and we are disappointed with the board’s unwillingness to accept meaningful shareholder input on these important concerns,” read AIMCo’s press release.
A statement from Viterra at the time responded that “Viterra is committed to ensuring that its board is comprised of the very best directors it can identify with appropriate skill sets to meet the evolving needs of the company.” The company later appointed an AIMCo executive to its board.
In an interview with Reuters, de Bever wouldn’t comment on whether the fund’s issues with Viterra’s governance played a role in the Glencore deal. “There’s a global consolidation in agricultural companies, and a global interest in agricultural assets. So you have to look at it against that backdrop, I think,” he said.
De Bever explained that AIMCo would continue to look for quality investment opportunities in food production. “We still feel that Western Canadian agriculture has not realized its full potential, and it’s got enormous potential in the next 10 to 20 years,” he told Reuters.